Alphabet-owned, American multinational technology giant, Google, will slow the pace of hiring through 2023 amid the mounting global economic headwinds, the company’s chief executive officer, Sundar Pichai, said in an email to employees.
According to reports, Pichai said the company added approximately 10,000 ‘Googlers’ in the second quarter. “Because of the hiring progress achieved so far this year, we’ll be slowing the pace of hiring for the rest of the year, while still supporting our most important opportunities,” he said. “For the balance of 2022 and 2023, we’ll focus our hiring on engineering, technical, and other critical roles, and make sure the great talent we do hire is aligned with our long-term priorities.”
Apart from a global economic downturn, it is also speculated that the move comes after the company reported a slower pace of growth at 23% from a year earlier in the first quarter, down from 34% growth in the first three months of 2021, according to CNBC.
The internet behemoth froze hiring during the 2008 financial crisis, but it has otherwise proved remarkably resistant to the tech sector’s economic downturns. According to Bloomberg, Alphabet, Google’s parent firm, which employed almost 1,64,000 people as of March this year, has mostly hired in recent years for Google’s cloud division and new industries such as hardware.
It seems the company is not entirely pausing the hiring but it makes sense for it to be particular about where it will spend the money as the global economy is headed towards recession.
Google has joined companies like Uber, Meta, Spotify and Snap that have sent similar intimations to their employees warning about tough times requiring cost-cutting measures. Companies like Twitter, Netflix and GameStop have recently trimmed their workforces. In India, several edtech startups have also sacked employees as the global economy is slipping into recession just as it recovers from the Covid-19 pandemic.
Most central bankers across the globe have started withdrawing pandemic-era support measures and have started raising interest rates to tame inflation. However, volatile oil prices from the fallout of Russia’s Ukraine invasion in late February have posed downside risks to delicate global economic recovery.
The International Monetary Fund, or IMF, has reduced its growth forecast for the United States to 2.3 percent this year, down from 2.9 percent last month. The Washington-based financial organization anticipates the world’s largest economy’s unemployment rate to rise to 3.7 percent this year, up from 3.2 percent last year, and to exceed 5 percent in both 2024 and 2025.